Topic: How To Invest

Wall Street Stock Forecaster Hotline – Friday, July 17, 2020

Article Excerpt

WELLS FARGO & CO., $24.95, New York symbol WFC, remains a buy for long-term gains. Due to rising loan-loss reserves in response to the COVID-19 pandemic, the bank is cutting its quarterly dividend by 80.4%. Starting with the third quarter payment, investors will receive $0.10 a share instead of $0.51. The new annual rate of $0.40 yields 1.6%. In the quarter ended June 30, 2020, Wells Fargo set aside $9.53 billion to cover future loan losses. That’s compared to just $503 million in the year-earlier quarter. As a result, the bank lost $0.66 a share (or a total of $2.69 billion) in the quarter. That was worse than the consensus forecast of a $0.20-a-share loss. The higher credit provisions weighed on earnings. Another key factor was the bank’s $1.2 billion in settlement costs related to the 3.5 million unauthorized accounts its employees opened in order to meet sales targets. A year earlier, Wells Fargo earned $1.30 a share (or $5.85 billion). Revenue in the quarter…

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